Apple Reinvents The Credit Card

CUPERTINO, CA - MARCH 25: Jennifer Bailey, vice president of Apple Pay, speaks during an Apple product launch event at the Steve Jobs Theater at Apple Park on March 25, 2019 in Cupertino, California. Apple announced the launch of it's new video streaming service, unveiled a premium subscription tier to its News app, and announced it would release its own credit card, called Apple Card. (Photo by Michael Short/Getty Images)

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Behold: the Apple Card, the company’s new take on the credit card. Yes, that’s right: there’s no number in the front or in the back, and no CVV either. No signature, of course. Those are all things of the past, when security was about secret numbers that could be copied or signatures that could be easily forged. This isn’t the first card without a number on the front, but it is the first without a number at all. Of course, the Apple card has a number, but the number is in your Apple Wallet, and when you pay with it, like when you pay with Apple Pay, a number is randomly generated and is only valid for that transaction, thus reducing the danger of fraud. The Apple Card is made from titanium and laser-etched, but in reality, you’ll only remove it from your pocket when you want to show off or pay in one of the fewer and fewer places not kitted out for smartphone payment (in the United States, smartphone payment is accepted in 70% of establishments, in Canada and Spain in 80%, in the United Kingdom in 85%, and in Australia in 99%). The point about the card is that nobody can copy anything from it, and if you lose it, you can immediately ask for a new one in Wallet, cancelling the previous one.

So far, Apple has not become a bank. The card, only available in the United States, is issued by Mastercard and Goldman Sachs. But this is nevertheless more than a credit card bearing its logo: as the company states, it’s “a new type of credit card created by Apple, not by a bank,” and has been specially designed for use on the iPhone, with all the advantages of an electronic or connected product: transactions and spending information in real time, immediate repayment of outstanding credit at any time, a 2% refund of the amount spent — or 3% if you spend it on Apple products — in the form of Apple Cash (instantly available money that can be spent on anything or sent to a friend via a message), identification of transactions through Apple Maps, transparent interest rates that fall the more you pay back (yet to be published) encouraging the user to pay less interest, not a single commission, and with customer service via chat. But above all, extra security thanks to its biometrics and Apple Pay’s unique numbering technology, and equally importantly, privacy, the word repeated a thousand times throughout Monday’s presentation: Apple does not know, or want to know what you have bought, where you bought it or how much you spent, and Goldman Sachs, although it must have access to that information to process it, has agreed not to share or sell your data to anyone.

International readers should remember that the card is a US product, and one that for the moment is only available in the United States, where roughly one third of users still receive virtually no information about spending until a letter arrives — yes, I said letter, written on paper, with a stamp, and a postmark — at the end of the month to be returned in the stamped, addressed envelope included, with a signed check (yes, a check, remember them?) for the amount you wish to repay. This all may seem a little antiquated to most Europeans or Asians, but for many Americans, the Apple card is not so much modern as science-fiction.

As has happened previously when Apple reinvents a product, there will be no shortage of critics pointing out that the ingredients of the Apple Card all previously existed. After all, haters gonna hate. Sure, any number of brand cards offered loyalty benefits and cashback reward programs, although never in real time. As said, numberless cards have been around for a while, although they still had the number on the back. No fees? Right, but you paid commissions, otherwise, you paid a quota, or the company sold your data or scammed you with abusive interest rates. Information and analysis in real time? Sure, some cards from fintech companies or innovative banks offer this already. But taken together, the benefits of the Apple Card are hard to beat and may prompt many users to ditch their current plethora of cards, while obliging the mainstream banks to up their game.

Monday’s Apple event also saw, as expected, the unveiling of news services, audiovisual content, games… if you want to use all the services offered by the company, get ready to start paying a hefty monthly fee. Tim Cook’s Apple, which some said could not innovate, has already entered into more business areas and reinvented more products than Steve Jobs managed during the historic Apple era. In addition, it is focusing increasingly on services, which means that all companies with businesses in that area should start thinking about which part of their value chain can be reinvented, rethought and redesigned to offer a better experience.